Valaris (VAL)
NYSE:VAL
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Valaris
(NYSE:VAL)
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Rating:76Outperform
Price Target:
$116.00
▲(16.03% Upside)
Action:ReiteratedDate:03/21/26
The score is driven primarily by solid TTM profitability and improving leverage, supported by a strong technical uptrend. A very low P/E boosts the valuation component, while the overall score is tempered by weaker cash conversion and earnings cyclicality/volatility; corporate events are favorable (backlog growth and agreed acquisition) but carry execution/approval risk.
Positive Factors
Large multi-year contracted backlog
A $4.7B contracted backlog, bolstered by ~$900M of awards, provides multi-year revenue visibility and supports rig utilization and dayrates across key basins. This materially reduces short-term demand exposure and underpins cash flow predictability and contract-led earnings over the medium term.
Negative Factors
Cyclical earnings volatility
Offshore contract drilling is commodity- and capex-cycle sensitive; Valaris’s historical swings from deep losses to outsized profits show earnings can compress rapidly in downturns. This volatility complicates capital allocation, debt servicing and long-term planning despite recent strong margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Large multi-year contracted backlog
A $4.7B contracted backlog, bolstered by ~$900M of awards, provides multi-year revenue visibility and supports rig utilization and dayrates across key basins. This materially reduces short-term demand exposure and underpins cash flow predictability and contract-led earnings over the medium term.
Read all positive factors
Valaris (VAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.92B
Dividend YieldN/A
Average Volume (3M)1.02M
Price to Earnings (P/E)3.6
Beta (1Y)0.99
Revenue Growth6.81%
EPS Growth-61.94%
CountryUS
Employees4,130
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)10.26
Shares Outstanding69,230,930
10 Day Avg. Volume828,431
30 Day Avg. Volume1,021,494
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.12
Price to Sales (P/S)1.50
P/FCF Ratio17.55
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue3.17
Enterprise Value/Gross Profit10.75
Enterprise Value/Ebitda9.87
Forecast
1Y Price Target
$76.00Price Target Upside-23.98% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)3.33
Revenue Forecast (FY)$2.12B
Valaris Business Overview & Revenue Model
Company Description
Valaris Limited provides offshore contract drilling services to the international oil and gas industry. The company owns an offshore drilling rig fleet of 56 rigs, which include 11 drillships, 4 dynamically positioned semisubmersible rigs, 1 moore...
How the Company Makes Money
Valaris primarily makes money by contracting its offshore drilling rigs to exploration and production companies under drilling contracts. The core revenue stream is contract drilling services, typically paid as a dayrate (a fixed daily fee) for th...
Valaris Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong financial and operational performance with significant contract awards and a robust outlook for offshore drilling demand, despite some challenges in maintaining continuous operations and near-term commodity price uncertainties.Positive Updates
Strong Financial Performance
Valaris delivered a strong quarter with adjusted EBITDA of $163 million and free cash flow of $237 million, supported by solid operational performance and a fleet-wide revenue efficiency of 95%.
Negative Updates
Decreased Revenue and EBITDA
Total revenues decreased to $596 million from $615 million in the prior quarter. Adjusted EBITDA also fell from $201 million to $163 million due to fewer operating days and the absence of a prior quarter's nonrecurring benefit.
Read all updates
Q3-2025 Updates
Positive
Negative
Strong Financial Performance
Valaris delivered a strong quarter with adjusted EBITDA of $163 million and free cash flow of $237 million, supported by solid operational performance and a fleet-wide revenue efficiency of 95%.
Read all positive updates
Company Guidance
In the third quarter of 2025, Valaris reported strong financial results, achieving an adjusted EBITDA of $163 million and generating an adjusted free cash flow of $237 million. The company maintained a fleet-wide revenue efficiency of 95% and repurchased $75 million of shares, reflecting a commitment to shareholder returns. Valaris also secured nearly $200 million in new contracts and extensions, increasing its total backlog to $4.5 billion. Notably, the company sold the 27-year-old jack-up VALARIS 247 for $108 million in cash, enhancing financial flexibility. Looking ahead, Valaris anticipates strong demand in the offshore drilling market, with a robust pipeline of opportunities, particularly in deepwater regions, supporting its high-specification fleet. The company remains focused on operational excellence, commercial strategy execution, and disciplined cost and fleet management to deliver long-term shareholder value.Valaris Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.37B | 2.36B | 1.78B | 1.60B | 1.23B |
| Gross Profit | 593.00M | 601.70M | 240.60M | 219.30M | 164.50M |
| EBITDA | 797.40M | 487.80M | 142.20M | 154.80M | 89.70M |
| Net Income | 982.80M | 373.40M | 865.40M | 176.50M | -4.49B |
Balance Sheet | |||||
| Total Assets | 5.30B | 4.42B | 4.32B | 2.86B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 606.40M | 368.20M | 620.50M | 724.10M | 608.70M |
| Total Debt | 1.20B | 1.17B | 1.16B | 565.60M | 555.30M |
| Total Liabilities | 2.13B | 2.18B | 2.33B | 1.56B | 1.53B |
| Stockholders Equity | 3.17B | 2.24B | 1.99B | 1.29B | 1.07B |
Cash Flow | |||||
| Free Cash Flow | 202.70M | -99.70M | -428.60M | -80.00M | -124.90M |
| Operating Cash Flow | 546.20M | 355.40M | 267.50M | 127.00M | -66.00M |
| Investing Cash Flow | -205.60M | -452.30M | -665.80M | -16.70M | -3.70M |
| Financing Cash Flow | -103.60M | -158.30M | 285.50M | -6.40M | 388.70M |
Valaris Technical Analysis
Positive
99.97
Price Trends
87.66
Positive
70.97
Positive
60.27
Positive
Market Momentum
3.19
Positive
59.82
Neutral
41.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VAL, the sentiment is Positive. The current price of 99.97 is above the 20-day moving average (MA) of 96.76, above the 50-day MA of 87.66, and above the 200-day MA of 60.27, indicating a bullish trend. The MACD of 3.19 indicates Positive momentum. The RSI at 59.82 is Neutral, neither overbought nor oversold. The STOCH value of 41.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VAL.
Valaris Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.61B | 6.88 | 39.31% | ― | 8.71% | 72.09% | |
76 Outperform | $6.92B | 3.62 | 38.72% | ― | 6.81% | -61.94% | |
73 Outperform | $4.35B | 7.55 | 28.11% | ― | 4.42% | -13.55% | |
69 Neutral | $7.33B | 13.11 | 28.18% | 1.25% | -10.19% | -23.74% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
58 Neutral | $6.90B | 40.10 | 2.26% | 3.24% | -1.43% | -63.13% |
* Energy Sector Average
VAL
Valaris
99.97
66.69
200.39%
NOV
NOV
19.14
6.85
55.75%
OII
Oceaneering International
36.32
18.24
100.88%
TDW
Tidewater
87.84
51.18
139.61%
WFRD
Weatherford International
102.20
57.01
126.17%
Valaris Corporate Events
Business Operations and StrategyFinancial Disclosures
Valaris Expands Offshore Contract Backlog and Streamlines Fleet
Positive
Feb 17, 2026
Valaris reported a fleet status update as of February 17, 2026, highlighting that new contracts and extensions since October 23, 2025 have added nearly $900 million of backlog and lifted its total contracted revenue backlog to about $4.7 billion. ...
Business Operations and StrategyM&A Transactions
Valaris Agrees to Be Acquired by Transocean
Positive
Feb 10, 2026
On February 9, 2026, Valaris and Transocean signed a Business Combination Agreement under which Transocean will acquire all outstanding Valaris shares via a Bermuda court-approved scheme of arrangement, issuing 15.235 Transocean shares for each Va...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Transocean to Acquire Valaris in $5.8 Billion Merger
Positive
Feb 9, 2026
On February 9, 2026, Transocean and Valaris announced a definitive all-stock business combination agreement under which Transocean will acquire all outstanding Valaris shares in a transaction valuing Valaris at about $5.8 billion and the combined ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.